Current Events in March 2020

An oil price war and escalating fears of the coronavirus are creating a perfect economic storm that will likely have two short-term results that are beneficial to consumers -- falling gasoline prices and record low mortgage rates.

Saudi Arabia launched an oil price war over the weekend, slashing prices by 20 percent overnight. The move is aimed at driving out weaker competitors and came after OPEC was unable to reach a production agreement with Russia.

As a result, U.S. oil refiners will pay significantly less for crude oil at a time when they normally curtail operations for maintenance and boost the price of gasoline. Instead of rising gasoline prices this spring, consumers may find them going even lower.

“Just the third collapse in crude oil prices during my career. 2008, 2015 and now 2020,” GasBuddy’s Patrick DeHaan wrote in a Sunday tweet. “Truly a remarkably past few days- never did I anticipate my somewhat wild prediction 2 weeks ago of $25-$35/bbl WTI coming true.”

Gas stations may react to the lower oil prices this week. Today, the AAA Fuel Gauge Survey puts the national average price of regular gas at $2.38 a gallon, five cents less than a week ago and nine cents less than a year ago.

Blame the coronavirus

The coronavirus is the catalyst in all of this. Fears of the economic damage being caused by the disease caused a sharp drop in oil demand, prompting the Saudis to act. It’s also sending investors fleeing from the world’s stock market and into U.S. Treasury bonds.

The more investors buy bonds, the lower the yield goes. The 10-year bond started trading Monday offering a record low yield of 0.44 percent, with some market analysts predicting it could go to zero.

That, in turn, is sending mortgage rates lower. Just last week, Freddie Mac reported that the average rate on a 30-year fixed-rate mortgage had fallen to 3.29 percent, a record low. With bond yields still falling, home buyers and those refinancing existing mortgages could see even lower rates.

Long-term impact?

While consumers may enjoy lower fuel prices and mortgage rates in the short-term, the longer-term impact is less certain. The twin nose dives of the oil and bond yields have already taken a heavy toll on the value of stock portfolios. Most market-watchers agree that the stock market has farther to fall.

Meanwhile, more attention is being focused on the cause of all this turmoil -- the coronavirus, codenamed COVID-19. Public health officials in the U.S. and abroad continue to ramp up efforts to contain the outbreak, with now over 100,000 confirmed cases in the U.S.

Hyundai Motor America is recalling 206,896 model year 2013-2014 Sonatas.

The low pressure fuel hose that connects the low pressure fuel pump to the direct injection fuel pump may crack over time due to heat generated within the engine compartment.

If the fuel line cracks, a fuel leak can occur, increasing the risk of a fire.

What to do

The remedy for this recall is still under development.

The recall is expected to begin April 24, 2020.

Owners may contact Hyundai customer service at (855) 371-9460. Hyundai's number for this recall is 189.

Mercedes-Benz USA (MBUSA) is recalling 2,101 model year 2020 CLA250s, CLA250 4MATICs & CLA35 AMG 4MATICs; model year 2020-2021 GLE350s, GLE350 4MATICs, GLE450 4MATICs, GLS450 4MATICs & GLS580 4MATICs; and model year 2021 GLE53 AMG Coupes, GLE63S AMG 4MATICs, GLS63 AMG 4MATICs & Maybach GLS600 4MATICs.

The instrument cluster software may deactivate the illumination of certain interior switches (switch bar, overhead control unit, steering wheel) if the hazard lights are turned on and the ignition switch is in the 'off' position.

If the interior switches are not illuminated, they may be more difficult to find and operate, increasing the risk of a crash.

What to do

MBUSA will notify owners, and dealers will update the instrument cluster software free of charge.

The recall is expected to begin April 14, 2020.

Owners may contact MBUSA customer service at (800) 367-6372.

BMW of North America is recalling 550 model year 2020 X6 sDrive40i, X6 xDrive40i, and X6 xDrive50i vehicles.

The rear spoiler may detach.

If the spoiler detaches while the vehicle is being driven, it can become a road hazard, increasing the risk of a crash.

What to do

BMW will notify owners, and dealers will inspect and replace the rear spoiler, as necessary free of charge.

The recall is expected to begin April 13, 2020. Owners may contact BMW customer service at (800) 525-7417.

Congress’ proposed $8.3 billion spending plan to combat coronavirus (COVID-19) is now official. President Trump approved the plan on Friday, and the checks are in the mail to federal, state, and local agencies, plus a supplemental $500 million in waivers for Medicare telehealth restrictions.

The measure includes $2.2 billion earmarked for health agencies and some $3 billion for vaccine research in hopes of combatting the virus. 

Hands across the aisle

When the chips are down like they are in this situation, the Republicans and Democrats take off their gloves and hold hands instead of trying to undo the other.

Both the Senate and the House of Representatives approved the funding measure in overwhelming bipartisan fashion earlier this week. The only stone in the bill’s path was Congress’ feeling that Trump’s original proposal was inadequate. The President then caved and gave Congress free reign to decide on exactly how much needed to be spent to be effective.

Numbers continue to rise

More than 80 countries have confirmed coronavirus cases, with the total death toll in the U.S. reaching 14 on Friday. There have been more than 225 cases confirmed across the country, according to NBC News.

The impact of the outbreak on consumers is vast. Amazon and Facebook have stepped up efforts to prevent price-gouging and alarmist advertising; airlines have done everything from offering waivers to taking extra precautions to make sure aircraft are sanitized; and tech firms are doing their best to warn people about virus-related email scams set on fleecing consumers.

Another cruise ship is suspected of being a hotbed of the coronavirus, codenamed COVID-19, and remains at sea after being refused entry to California’s ports.

Princess Cruises says another of its ships -- the Grand Princess -- is suspected of transporting some passengers who may have the virus. California health officials say they plan to test another 45 passengers before the ship is allowed to disembark in San Francisco.

The ship was on its way to Hawaii when it was ordered to turn around and return to California. The state’s governor, Gavin Newsom, said the order came after some of the passengers and crew developed symptoms related to the virus.

The Centers for Disease Control and Prevention (CDC) says three consumers who were previous passengers have tested positive for the coronavirus, and one of those passengers died. The ship is carrying 3,500 passengers and crew. San Francisco health officials say about 35 people have tested positive for the virus.

Diamond Princess ordeal

Last month, passengers aboard the cruise liner Diamond Princess spent two weeks in quarantine aboard the ship in a Japanese port after an outbreak of the virus. American passengers were eventually evacuated after many of them tested positive for the virus. At the time, the outbreak aboard the ship was the largest outside of China.

“That ship (Grand Princess) is now being delayed to provide ample opportunity for the CDC in partnership with Coast Guard and state health officials to conduct tests,” Newsom said at a briefing.

Test kits were delivered to the ship on Thursday and will be analyzed at a lab in Richmond, California. Results are expected later today.

Instructions to cruise lines

Fears about the coronavirus have taken a heavy toll on the travel industry, especially cruise lines. Some cruise lines have changed their schedules, especially for cruises to Asian ports. This week the Cruise Lines International Association issued these guidelines to member companies:

• Deny boarding to all persons who have traveled from, visited or transited via airports in South Korea, Iran, China, including Hong Kong and Macau, and any municipality in Italy subject to lockdown (quarantine) measures by the Italian Government, as designated by the Ministry of Foreign Affairs, within 14 days prior to embarkation.

• Conduct illness screening for all persons who have traveled from, visited or transited via airports in any destinations listed on the U.S. CDC “Coronavirus Disease 2019 Information for Travel” page within 14 days before embarkation. Illness screening includes symptom history checks for fever, cough and difficulty breathing in the 14 days before embarkation and taking of temperature.

• Deny boarding to all persons who, within 14 days prior to embarkation, have had contact with, or helped care for, anyone suspected or diagnosed as having COVID-19, or who are currently subject to health monitoring for possible exposure to COVID-19.

• Conduct pre-boarding screening necessary to effectuate these prevention measures. Enhanced screening and initial medical support are to be provided, as needed, to any persons exhibiting symptoms of suspected COVID-19.

With an eye towards the safety of children and the curtailment of spamming and offensive content, Apple put developers on notice that it’s going to be taking a hard line on which apps it will let in its app store going forward.

The company says it won’t only be rejecting apps over their content; it will also be looking to crack down on the triggers that developers build into apps that, for example, steal user data or cheat the system in any way.

“When people install an app from the App Store, they want to feel confident that it’s safe to do so -- that the app doesn’t contain upsetting or offensive content, won’t damage their device, and isn’t likely to cause physical harm from its use,” Apple told its developers in its updated App Store Review Guidelines. “If you’re looking to shock and offend people, the App Store isn’t the right place for your app.” 

Some of the more high-profile changes include the ability for apps to now use notifications for ads, stricter rules for dating and fortune-telling apps, and a new rule that allows Apple to reject apps that help users evade law enforcement.

Nope -- not in our App Store

Apple's new app screening raises the bar on the following:

Kid-oriented apps

Upfront and center, Apple tells developers that any app must comply with laws like the Children’s Online Privacy Protection Act (“COPPA”), the European Union’s General Data Protection Regulation (“GDPR”), and any other applicable regulations or laws. 

“We have lots of kids downloading lots of apps,” Apple said. “Parental controls work great to protect kids, but you have to do your part too. So know that we’re keeping an eye out for the kids.”

In Apple’s new law of the land, an app can only ask for birthdate and parental contact information as a way of complying with these statutes and nothing else. If a developer builds an app that asks for personal information, they better be ready to prove that the need for those details also complies with those privacy statutes.

Apple is also putting the squeeze on a developer’s dream of cashing in on kids, Going forward, it is banning third-party analytics or third-party advertising from child-oriented apps. 

Objectionable content

In its new guidelines, Apple says that apps on its platform “should not include content that is offensive, insensitive, upsetting, intended to disgust, in exceptionally poor taste, or just plain creepy.”

The company goes on to lay it out in no uncertain terms: “realistic portrayals of people or animals being killed, maimed, tortured, or abused … Depictions that encourage illegal or reckless use of weapons and dangerous objects, or facilitate the purchase of firearms or ammunition … Inflammatory religious commentary” are all forbidden.

User-generated content

Any app that depends on user-generated content or social networking services has to have “a method for filtering objectionable material from being posted to the app; a mechanism to report offensive content and timely responses to concerns; the ability to block abusive users from the service; published contact information so users can easily reach (the developer).”

Spamming

What would an app be without some kind of spam, right? Well, Apple app users are about to find out. 

Going forward, app developers are required to get customer consent and build in an opt-out feature that permits users to turn off those pesky push notification ads. 

If you don’t like it, go somewhere else

“The guiding principle of the App Store is simple - we want to provide a safe experience for users to get apps and a great opportunity for all developers to be successful,” was how Apple laid out the future for app developers. The company didn’t pull any punches about how firm its new stand is, either.

“We do this by offering a highly curated App Store where every app is reviewed by experts and an editorial team helps users discover new apps every day. For everything else there is always the open Internet. If the App Store model and guidelines are not best for your app or business idea that’s okay, we provide Safari for a great web experience too.”

Recent studies have found how household cleaning products can negatively affect children’s health, and now a new study conducted by researchers from Ohio State University found that they can also affect toddlers’ development. 

The researchers found that children were more likely to experience cognitive and language delays when they were regularly exposed to toxic household chemicals. 

“We found that a significant percentage of mothers with young children may commonly expose their children to toxic household chemicals, possibly because they are unaware that such materials may be harmful,” said researcher Hui Jiang. “A lot of mothers seem to know to limit exposure to toxic chemicals during pregnancy, but once their child is born, they may think it is no longer a problem.” 

Protecting children

To determine what effect typical household cleaners can have on kids’ development, the researchers had nearly 200 families participate in the study. 

Mothers were asked to report on the kinds of cleaning products they used in the home at two different intervals: during pregnancy and then again when their children were between one and two years old. This also included their use of pesticides in or around the home and any potential neighborhood influences that their children could be exposed to. 

The children were assessed twice by the researchers. In the first meeting, the team checked children’s language skills when they were between one and two years old. This was repeated in the second meeting when the children got closer to the two-year-old mark. 

The researchers found that more women opted to reintroduce household cleaners after their children were born, which played a role in their toddlers’ language and cognitive development. The study found that regular exposure to cleaners with toxic chemicals was associated with language and cognitive delays at the two-year-old check-in. 

“When kids reach about two years old, that is a peak time for brain development,” said researcher Laura Justice. “If the use of toxic chemicals is interfering with that development, that could lead to problems with language and cognitive growth.” 

Moving forward, the researchers hope that these findings highlight how serious exposure to cleaning materials can be for young ones. 

“Parents need to understand the delicacy of brain development in the first several years of life and their children’s susceptibility to chemical exposure,” said Justice. 

If you can qualify for a loan and find a house you’d like to live in, then there may have never been a better time to buy a home. Mortgage rates have sunk to an all-time low, according to Freddie Mac.

“The average 30-year fixed-rate mortgage hit a record 3.29 percent this week, the lowest level in its nearly 50-year history,” said Sam Khater, Freddie Mac’s chief economist.

These low rates have caused a surge in mortgage applications -- particularly applications to refinance existing mortgages at a lower rate.

“Given these strong indicators in rates and sales, as well as recent increases in new construction, it’s clear the housing market continues to be a positive force for the broader economy,” Khater said.

Freddie Mac reports that the 15-year fixed-rate mortgage averaged 2.79 percent. A year ago, it was 3.83 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.18 percent, down from last week when it averaged 3.20 percent. A year ago at this time, the 5-year ARM averaged 3.87 percent.

The record might not last

It’s entirely possible those record low rates could go even lower.

Mortgage rates are falling because they are directly tied to the yield on the 10-year Treasury bond, which has cratered in the last week. Early Friday, the yield fell to 0.77 percent -- a record low -- because investors who fear the economic impact of the coronavirus are selling stocks and buying bonds. 

Rising demand for bonds means the U.S. Treasury Department doesn’t have to pay as much interest, so yields fall when demand rises.

Mortgage rates this low might lead to a surge in home sales under normal circumstances, but the U.S. housing market continues to suffer from extremely low inventory. There aren’t enough homes on the market.

But a big drop in interest rates might make some homes more affordable. For potential buyers on the edge of entry-level homes or slightly more expensive homes, the lower monthly payments that a lower interest rate provides could make a difference and provide more options.

Employment

Meanwhile, concerns about the economic fallout from the coronavirus could also give potential buyers pause. The Labor Department today reported that U.S. employment surged by 273,000 jobs in February, well ahead of consensus estimates.

But the February report reflects almost no effects from coronavirus fears and therefore provides little insight for the future. In fact, one of the biggest increases in employment last month came at bars and restaurants -- businesses expected to suffer as wary consumers shun public spaces.

In interviews with USA Today, a number of hiring managers have said they have already postponed hiring plans until they can determine the economic impact of the coronavirus.

BMW of North America is recalling 2,728 model year 2014-2019 M6 Gran Coupes.

The third brake light may become loose, possibly allowing the light to detach from the vehicle.

If the third brake light detaches from the vehicle, it would no longer provide the required lighting to following traffic, or may become a road hazard, increasing the risk of a crash.

What to do

BMW will notify owners, and dealers will inspect the third brake light and properly secure it with new fasteners. If the third brake light detached from the vehicle and is damaged, it will be replaced. All repairs will be performed free of charge.

The recall is expected to begin April 13, 2020.

Owners may contact BMW customer service at (800) 525-7417.

Volkswagen Group of America is recalling 8,572 model year 2016-2019 Audi TT Roadster Quattros and TT Coupe Quattros.

The fuel tank may become damaged in a crash by the fuel tank heat shield bracket.

A damaged fuel tank may leak fuel, increasing the risk of a fire.

What to do

Volkswagen will notify owners, and dealers will install a protective cap on the fuel tank heat shield bracket free of charge.

The recall is expected to begin April 10, 2020.

Owners may contact Volkswagen customer service at (800) 893-5298. Volkswagen's number for this recall is 20BX.

The coronavirus looms no larger than in the travel world. According to a new poll released Wednesday by the Global Business Travel Association (GBTA), the virus could potentially cost the industry $46.6 billion per month. 

Nearly every major airline has offered travelers waivers on existing bookings to waylay some of the trepidation, but flight loads are still lagging behind the norm.

In hopes of restoring some confidence and getting folks back on their airplanes, American Airlines, Delta Airlines, and Southwest Airlines are making it known that they’re going the extra mile by thoroughly cleaning and disinfecting anything a traveler may come in touch with.

American Airlines

At the top of its declaration on cleanliness, American wants to reaffirm the flying public that its  “cleaning practices have always met or exceeded all CDC guidelines.” The airline says it’s scrubbing down its aircraft with an EPA-approved disinfectant, as well as taking additional time on the ground to give each plane a 30-point cleaning package every day. 

The things travelers come in contact with the most -- like tray tables and armrests -- are also getting a more thorough cleaning. The air that passengers breathe is also getting added scrutiny. 

“Most of our aircraft are equipped with High-Efficiency Particulate Air (HEPA) filters that provide a complete air change approximately 15 to 30 times per hour, or once every two to four minutes,” the company said, noting that its HEPA filter's complete air change is similar to the standard for hospitals.

As far as inflight dining and beverage service is concerned, all catering equipment on international flights is getting extra sanitation and disinfection. That includes tableware, dishes, glassware, and utensils. Anything that’s not used gets discarded.

American seems to have thought of everything. It says even the headphones it passes out are being sanitized. 

Delta Airlines

Delta’s efforts are on par with American’s. In addition to consulting with the CDC, Delta has also called in the World Health Organisation (WHO) to ensure that it meets or exceeds the agency’s precautions related to the coronavirus.

One interesting procedure that caught ConsumerAffairs’ eye is Delta’s deployment of “fogging.”  The airline says that starting in February, when the coronavirus was in its infancy, it began using a fogging technique with an EPA-registered disinfectant on in-bound flights from Asia destined for the airline’s U.S. gateways (Atlanta, Detroit, Honolulu, Los Angeles, Minneapolis/St. Paul, Portland and Seattle). 

“We are working rapidly and have sourced additional machines to expand fogging to inbound international flights, prioritizing trans-Atlantic inbound flights from markets with reported coronavirus cases,” the airline noted.

Southwest Airlines

Southwest Airlines says that it, like Delta and American, is following recommendations from the CDC and WHO, as well as using HEPA filters and cleaning, sanitizing, and disinfecting the aircraft cabin every night.

It also says that each of its aircraft is “tidied” between flights “in accordance with an established program aimed at providing a clean and inviting cabin environment.” 

Wall Street has fretted that concerns about the coronavirus are affecting consumer behavior, in particular depressing the travel and hospitality industries.

There is early evidence that this is indeed occurring, but the virus is also spurring huge demand for other types of consumer products, to the point of creating nationwide shortages. Trying to find some Clorox Wipes? Good luck. Looking to pick up a bottle of Purell? Sorry, sold out.

Walmart, Target, and every major supermarket chain are struggling to keep store shelves stocked in the wake of a buying frenzy. And it’s happening everywhere, not just in cities where coronavirus cases have been reported.

In rural Virginia, hundreds of miles from the nearest reported case, an Ace hardware store immediately sold out of painter’s masks, even though they are totally useless in screening germs.

Limiting sales

Some retailers, such as Kroger, are taking measures to stop the hoarding of products associated with the virus outbreak and the fear it is generating.

"Due to high demand and to support all customers, we will be limiting the number of sanitization, cold and flu-related products to five each per order," the supermarket chain said in a statement. "Your order may be modified at time of pickup or delivery."

Progressive Grocer, an industry trade publication, reported a surge in grocery delivery orders from supermarkets on Tuesday of this week compared to the previous Tuesday. It also notes that food orders through Amazon were up by 67 percent.

‘Pandemic pantries’

Nielsen reports hand sanitizer and toilet paper may be just the tip of the shopping spree iceberg. Its investigation suggests consumers are busy building what it calls “pandemic pantries.”

“They’re also starting to think beyond emergency items, such as basic foodstuffs, including canned goods, flour, sugar and bottled water,” the company said in its report. “Concerns are having a ripple effect into non-food essentials as well. In the U.S., sales of supplements, fruit snacks and first aid kits, for example, are all on the rise.”

Nielsen worries that the hyper-buying is having a negative impact on supply chains, which are already taxed because factories in China have been closed or had their output reduced as that country copes with the virus.

In the U.S., Campbell Soup says it has ramped up the production of canned soup in anticipation that consumers will rush to stockpile non-perishable food items. In an interview with CNBC, company CEO Mark Clouse likened the response to how the company might handle a major weather disaster.

The House has taken the first step in providing a huge infusion of money to cope with detecting and treating the coronavirus, codenamed COVID-19.

By an overwhelming 415-2 vote late Wednesday, lawmakers approved $8.3 billion in emergency funds, some of which will go to the Centers for Disease Control and Prevention (CDC) and other health agencies. 

The shape of the final package was the subject of intense negotiations ahead of the vote. It includes about $3 billion for research into potential vaccines and another $2.2 billion for prevention and preparedness efforts.

The Trump administration initially asked for $2.5 billion, but Senate Democrats argued that more was needed. At a news conference last week, President Trump said he would accept as much money as Congress was willing to authorize.

The next stop for the funding bill is the Senate, where a speedy vote is expected. President Trump could sign the legislation before the end of the week.

So far, 11 people in the U.S. have died from complications of the coronavirus, all of them elderly and with other health problems. More than 3,100 deaths have occurred outside the U.S., mostly in China.

Washington state hard hit

Ten of the U.S. fatalities are in Washington State, where an assisted living facility suffered an outbreak from contact with someone who had traveled to Wuhan, China. The eleventh fatality was in the Los Angeles area.

The CDC says there are at least 138 confirmed cases of the coronavirus in the U.S. as of Wednesday evening. Health officials in Los Angeles reported six new cases over the last two days, resulting in a declaration of a health emergency.

Kathryn Barger, chairwoman of the Los Angeles County Board of Supervisor, denied that the county had succumbed to panic. She said the measure allows local health officials greater access to resources from the federal and state governments.

Former FDA Commissioner Scott Gottlieb, appearing on CNBC, said it’s likely that there are “thousands” of COVID-19 cases in the U.S. He says they haven’t been detected because of a lack of testing.